Lufthansa accused of not understanding business travel (or ignoring needs of corporates)

Lufthansa Group has been invited to talks with a group of 100+ business travel agencies and corporate buyers to iron out issues surrounding the controversial GDS tax.

The "high-level industry delegation", brought together under the auspices of the Business Travel Coalition, will be sharing its concerns over the Euro 16 levy to be imposed on bookings made by the GDS to competition authorities in Bonn, Brussels and Washington DC.

The group wants to meet with Lufthansa's senior management team ahead of those visits to "ensure we completely understand your objectives and that you are fully cognizant of our apprehensions".

The signatories to a letter addressed to Lufthansa chairman and CEO, Carsten Spohr, do not include the GDSs at the heart of the debate: Travelport, Amadeus or Sabre.

Lufthansa announced in June that it would be adding the tax - known as its Distribution Cost Charge - from September 2015.

Earlier this week the BTC questioned the legality of Lufthansa's new strategy, but the airline responded swiftly to say that its decision was "fully compliant with all legal requirements and had of course been checked carefully in advance of the announcement".

The letter to Spohr is another volley of criticism in an increasingly bitter battle between proponents of the status quo and the airline and its supporters.

The main extract from the letter:

In an apparent process of seeking to increase revenue, decrease comparison-shopping and diminish intra and inter distribution channel competition, you would of course not just shift the cost of distributing your products to consumers and the managed-travel community, but also create substantial new costs within the industry by effectively insisting on a direct-connect strategy for LHG’s contracted customers.
LHG is either profoundly unaware of the needs and complexities of serving the needs of the business traveler, or it has chosen to disregard those requirements altogether.
As the cheerleading by your airline competitors for your plan at the recent IATA gathering in Miami, FL implies, your competitors are poised to follow LHG.
Consequently, corporate, university and government travel and sourcing managers, and the travel management companies (TMCs) that support them, may soon be forced to deal with hundreds of airlines’ one-off direct-connects undermining our existing highly efficient corporate travel procurement processes by requiring us to create new infrastructure and workaround procedures.
Moreover, you are forcing us into an expensive case-by-case analysis of which fare is more economical to purchase.
LHG is attempting to substitute its judgment for our clearly articulated preferences.
Without any collaboration whatsoever, you are forcing a choice between highly inefficient processes for managed-travel programs, or paying significantly higher fares.
This is a bad choice and we do not welcome your unilateral approach. Travel managers, in close collaboration with their TMCs and technology partners, have developed a professional and productive travel procurement environment that must not be weakened.
Instead, we need to find ways to strengthen our preferred channel and, as such, urge you to reconsider your surcharge plan and forge distribution agreements that are equitable for all distribution system participants.
We have many additional concerns regarding your new plan’s potential negative worldwide implications for the functionality of the competitive structure of the industry, the ability of TMCs/travel agencies to remain viable distribution-channel competitors to airlines and the accessibility of choice for consumers and managed-travel customers.